Factors Determining the Development of Small Farms in Central and Eastern Poland

Abstract

The agrarian structure in Poland is dominated by small farms; the large share of these is a result of historical consequences. The economy has pushed small farms toward economic efficiency, which in farming often translates into increasing the scale of production. The primary objective of this research was to present the directions of the changes in the number of small farms in Central and Eastern Poland and to indicate the factors determining their functioning and development. The research was based on a random sample selection from rural municipalities, villages and small farms. The researchers collected 19 completed surveys from municipal agricultural officers, 75 surveys from village mayors and 116 surveys from small and active farms. The data from the farm surveys was analysed using k-mean cluster analyses and the Principal Component Analysis (PCA) to distinguish farms into homogenous groups. Three types of farms were identified: “hobby”, “two-occupation” and “professional” farms. The research shows that in the municipalities of Central and Eastern Poland, the number of landowners (over 1 ha of arable land) paying agricultural tax increased by 9% between 2005 and 2017. A significant gap was identified between the number of “official farmers” and “active” farmers. In the farm category surveyed, “active” farmers numbered only 33% of all farming entities. The surveys confirmed that the development of small farms is particularly influenced by external factors (EU funding; national benefits), rather than internal (entrepreneurial) factors. An in-depth survey of farmers, municipal agricultural officers and village mayors shows that “professional” farmers (Cluster 0) are expected to invest, develop and innovate. Farmers managing “hobby” and “two-occupation” farms have a reserved attitude towards investment and their objective is to maximise the benefits related to the arming status. In the authors’ opinions, “professional” farms have the highest probability of being economically viable, while others tend to focus on the provision of public goods related to financial support.

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Do operating subsidies increase labour productivity in Polish farms?

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